Business Concepts: Stakeholders, Growth, Cultures, and Trade

Flashcards covering key concepts from notes on stakeholders, growth strategies, economies of scale, organizational culture types, Brexit, and trading blocs.

What is a stakeholder?

A person, group, or organization who can affect or be affected by actions, objectives, and policies of a business and are interested in its activities.

What is the stakeholder model of management?

A management approach that emphasizes considering the interests of all individuals and groups affected by a company's actions, not just shareholders.

What is a shareholder?

Owner of a business that holds shares in it.

What is the shareholder approach?

The view that the firm exists principally for the benefit of its shareholders, with the board and managers aiming to maximise shareholder value.

What does the law of diminishing returns state?

If you keep increasing one production factor (e.g., workforce) while keeping others constant, there is a point after which additional input yields progressively less output.

What is the principle of increased dimension?

How increasing the number of dimensions in a system affects its properties or how we perceive it.

What is indivisibility in economies of scale?

The concept that certain factors of production cannot be reduced below a minimum size or output level without significantly harming efficiency or feasibility.

What does the law of multiples describe?

As production increases, the average cost per unit tends to decrease due to spreading fixed costs over more output.

What does ancillary mean?

Providing necessary support to primary activities or operations.

What is disintegration?

The process by which a previously integrated entity breaks down into smaller, separate components or functions.

What is a commercial service?

A service offered for profit or business purposes, often involving the provision of services.

What are technical economies of scale?

Cost advantages gained from using more advanced or specialized machinery and equipment as a business grows.

What is organic growth?

Expansion of a business through its own resources and efforts, rather than through mergers, acquisitions, or external means.

What is inorganic growth?

Expansion through external means, typically mergers, acquisitions, or strategic partnerships, rather than internal development.

What is investment speculation?

Buying or trading an asset to generate a significant return, usually through short-term price movements.

What is speculation?

An activity of guessing possible answers to a question without having enough information to be certain.

What does consolidate mean?

Make something physically stronger or more solid.

What is an asset stripper?

A person or company that acquires a business, typically undervalued or struggling, with the intention of selling off its assets individually for profit, rather than operating the business as a going concern.

What is investor speculation?

An act of making calculated investment in high-risk opportunities with the chance of a big payoff.

What is Brexit?

Withdrawal of the United Kingdom from the European Union.

What is a power culture?

A culture in which central power makes decisions; there are few rules, individuals in power pursue their own objectives, creating a competitive atmosphere.

What is role culture?

Decisions are made through well-established rules and procedures; power is associated with the role rather than individuals.

What distinguishes role culture from power culture in terms of influence?

In a role culture, influence and control come from the roles people occupy rather than from individuals.

What characterizes a role culture organization?

A tall hierarchy with a long chain of command; described as a bureaucratic culture.

What is bureaucracy?

A system characterized by a hierarchical structure, formalized rules and procedures, and a division of labour; can promote efficiency but may lead to inflexibility and lack of innovation.

What is a tasks culture?

Power is given to those who can complete the task; authority comes from expertise rather than a formal role; adaptability and dynamism are important.

What is a person culture?

A culture where a number of individuals with expertise operate independently; the organization exists to support them (e.g., accountants, lawyers, doctors).

What is corporate culture?

The shared values, beliefs, and practices that shape how a company operates and how its employees interact.

What is a trading bloc?

A group of countries that have agreed to reduce or eliminate trade barriers among themselves to promote trade and economic integration.